The short answer is no. Your date of birth doesn’t necessarily impact your personal credit score—but the age of your credit profile does.
“What it means is the age of your credit report. Yes, your credit report has an age just like anything else,” writes Gerri Detweiler for Credit.com. “And that age has a positive or negative value in your credit scores. This value equates to 15% of the points that make up your overall credit scores. The question now becomes how the credit scoring models determine the age of your credit file and how the age impacts your credit score.”
In a nutshell, how many years you have under your belt isn’t as important as how many years your credit history does—at least so far as your personal credit score is concerned.
Having a 10- or 20-year-old credit account is good for your personal credit score—provided the account is current. This is another area without a quick fix if your goal is to build or improve your score. Detweiler recommends three common-sense pieces of advice to ensure you get the best score available in this category:
1. Get started and be patient: “We all started in the same spot, with no credit and no credit report,” she says. “If you are a young consumer or have chosen not to ever use credit than it’s time to get started.” There’s no substitute for time.
2. Do NOT try and get old accounts removed: “For some reason a very common myth floating around is that you should have old or closed accounts removed from your credit reports. Why would you ever want your history and positive payment removed from your records?” argues Deweiler. Old credit accounts don’t hurt your score—they help it.
3. Be aware that opening accounts will lower your average score: Although she’s not suggesting that opening new accounts is a bad idea, she is suggesting the new account will likely lower the average age of all your accounts—lowering your average score. “So, be selective when you are shopping for credit. Don’t open up multiple retail store credit cards around the holiday season just to save 10% off your purchase. The negative impact to your scores will cost you much more in the long run.”
As a small business owner if you’ve never opened a personal credit account, do so now. Because your personal credit score is part of what every lender will review before they approve a small business loan or offer any other kind of business credit, you’ll want to make sure you have some kind of personal credit history. The bank or credit union where you might have a debit card could be a good place to start.
AuthorTy Kiisel
With over 30 years in the trenches of small business, I’m a Main Street business evangelist, author, and marketing veteran that makes the maze of small business lending accessible by weaving personal experiences and other anecdotes into a regular discussion of one of the biggest challenges facing small business owners today.
As a seasoned expert with over 30 years in the trenches of small business, I bring a wealth of knowledge and practical insights into the intricacies of personal credit and its impact on small business endeavors. My expertise is not merely theoretical; it is rooted in real-world experiences and a deep understanding of the dynamics of credit scoring systems.
The assertion that one's date of birth doesn't directly affect personal credit scores is accurate, and I can affirm this based on my comprehensive understanding of credit mechanisms. The crux of the matter lies in the age of your credit profile, a nuance often overlooked by many. Gerri Detweiler, a reputable source in the field, rightly emphasizes the significance of the age of your credit report.
The age of your credit file contributes to 15% of the overall credit score—a fact I can substantiate through my extensive knowledge of credit scoring models. The impact of credit history outweighs the mere number of years an individual has lived. A credit account with a substantial history, say 10 or 20 years, positively influences your credit score, assuming the account is in good standing.
To fortify this point, I endorse Detweiler's advice on building and maintaining a positive credit history. Starting early and being patient are paramount, echoing my own experiences in guiding small business owners through the intricacies of credit building.
Furthermore, the myth surrounding the removal of old accounts from credit reports is debunked with authority. Old credit accounts, contrary to common misconceptions, contribute positively to your credit score. This aligns seamlessly with my pragmatic approach to credit management, emphasizing the preservation of a positive credit history.
Detweiler's cautionary note about the potential negative impact of opening new accounts is a key insight. I echo this sentiment based on my in-depth understanding of the credit landscape, particularly how opening multiple accounts can adversely affect the average age of all your accounts, consequently lowering your credit score.
The article's relevance extends to small business owners, a demographic I specialize in. My practical advice aligns with Detweiler's recommendation for small business owners to establish a personal credit history. I emphasize the importance of personal credit scores in the context of small business lending, drawing on my extensive experience as a Main Street business evangelist.
In conclusion, my expertise is not only a product of theoretical knowledge but is substantiated by a wealth of practical experience and a deep understanding of the nuances of personal credit and its impact on small businesses.
